Dorchester plans to raise $10m

Dorchester Pacific wants to raise a minimum of $10 million of new capital and make peace with its debenture holders to set the company up for a consolidation in the non-bank sector.

The finance company owner yesterday reported a loss of $8.5 million in the six months to September 30 after an $8.4 million charge for changes in the value of its debenture notes. This compared to a $35 million loss last year.

Chairman Barry Graham said the company had generated cash "to pay 42.5 per cent by December 31 of debenture holders' principal under the deferred repayment plan". Directors were now of the view that full repayment would not be possible without new shareholder funds.

The company had put a restructuring and recapitalisation proposal to trustees to achieve full settlement with investors and take Dorchester out of moratorium.

The settlement has four components but is estimated to return between 87c to 91c in the dollar of principal to debenture holders. The proposal is yet to be finalised with the trustee.

- NZPA